STATE TO BUILD LAKES HYDRO

Press, Volume CII, Issue 30054, 12 February 1963, Page 12

STATE TO BUILD LAKES HYDRO

Comalco To Hand Back Water Rights (From Our Own Reporter) WELLINGTON, February 12. The giant hydro-electric station on Lakes Te Anau and Manapouri will be built in spite of difficulties which have arisen—but the New Zealand Government will assume responsibility for the project. Agreement has been reached between the Government and Comalco by which the water rights to the lake system will be handed back to the Government. It is understood that the Prime Minister (Mr Holyoake) will announce the details of the agreement between the Government and Comalco to a Government Caucus in Parliament Buildings next Thursday morning. Afterwards he is expected to release for publication a summary of the new agreement, together with plans for building the plant.

In terms of the original agreement between the Labour Government and Colmalco, signed in 1960, the company was given exclusive rights to develop the full 700,000 kilowatt potential of the southern lake system to provide power for an aluminimum smelting plant at Bluff. The difficulty of raising sufficient finance for the huge project has delayed Comalco’s plans. The new agreement will permit the Government to build the power station, but will give Comalco the right to buy back whatever power it needs, should it decide within the next year or so to build an aluminium smelter.

It is believed Comalco will have the right to obtain up to 500,000 kilowatts of continuous power (up to 100 per cent, load factor) provided it takes up the option within the next 18 months to two years.

The remainder of the Te Anau-Manapouri potential of 200,000 kilowatts of power at

the 50 per cent, load factor required for the national grid—will be available as of right to the Government. This is roughly the equivalent of 100,000 kilowatts of continuous power. Comalco Option It is understood Comalco will have the right to take less than 500,000 kilowatts of continuous power should its plans for a smaller plant require less than the original estimate. Any block of power which the company does not require for aluminium smelting will be available Jo the Government for the national grid. This means that if, in the final analysis. Comalco abandons its plans for aluminium smelting, a tptal of 600,000 kilowatts of continuous power, or about 1,200,000 kilowatts at the national grid factor of 50. per cent., would be available to the Government. This, according to experts, would be significant in reducpower Available in New Zealand today. The total potential of

1,200,000 kilowatts is not much less than the total installed generating capacity of the entire New Zealand electricity system today. The Southland scheme will be built in two stages. The first, which will not necessitate the raising of Lake Manapouri, is expected to cost close to £35 million. Development of the full potential would require the raising of the lake level, but would be significant in reducing the cost a unit of power to an extraordinarily low figure. The availability of power for the grid from Manapouri will mean that the comparatively more expensive Aviemore project on the Waitaki river—to produce 220,000 kilowatts —will be postponed for at least two years. After that time, if Comalco takes up its full share of the Manapouri scheme, Aviemore power will be needed for the national grid. Aviemore is expected to cost £22 million. World Bank Finance In the meantime, Government money set aside for Aviemore will be diverted to Manapouri, but it is expected that the World Bank finance which the Government was prepared to guarantee for Comalco will still be available for the Southland scheme now that direct building by the Government is envisaged. The new agreement will require new legislation to amend the Manapouri-Te Anau Development Act, 1960. The new arrangement will give Comalco a breathing space of up to two years. Under the old arrangement it would have been required to start construction of the power plant long before it was in a position to decide the economics of the proposed smelter at Bluff. Now, with the power available at short notice from a Governmentbuilt generating station, Comalco can have a smelting plant at Bluff within two years of making the decision to proceed. At the same time, the Government will get the benefit of a large slice of extremely cheap power to service the national grid.